No sector has been left unscathed by the economic shock of Covid-19, with the strained non-profit sector taking an especially hard financial knock during the pandemic. The private sector has done much to alleviate widespread hunger and protect communities against infection, but many companies have also repurposed their corporate social investment budgets, which has affected programming.
On 25 March 2021, responsible business consultancy Trialogue hosted a webinar to examine how companies have changed their approach to grantmaking as a result of the pandemic, and how non-profit organisations can secure and retain funding in a difficult financial environment. The panellists were Nicole Solomon, group CSI Manager at AECI, Noluvo Vovo Ngcwabe, head of CSI at Barloworld, and Nonkqubela Maliza, director of corporate and government affairs at Volkswagen SA.
A snap poll (below) conducted at the start of the webinar indicated that 53% of the non-profit organisations attending the webinar had experienced a decrease in corporate funding during the pandemic, with 20% having their funding put on hold.
What corporates look for in non-profit partners
A second snap poll (below) indicated that 79% of corporates attending the webinar look for proven impact when choosing a non-profit partner. They also prefer to work with NPOs that are in alignment with their core focus areas (59%) and can demonstrate financial standing and existing corporate support (31%).
For AECI, creating long-term impact is vital, and this means rolling out strategic programmes with clear exit strategies, so beneficiaries are not ultimately dependent on donor funding. STEM subject programmes are a natural fit for the company, but they should be able to show that their beneficiaries’ lives have been changed, for example, by accessing tertiary education and acquiring skills relevant to the job market.
“True transformation is being able to have an impact on someone’s life so they’re able to empower themselves and others. We want to restore economic dignity to people,” Solomon told attendees. She referred to a project whereby women were taught plumbing and business skills and were able to earn a living in their community. The funding model involved ploughing funds back into the NPO so it could sustain itself in the long term.
For Barloworld, which focuses on both national and local programmes and is largely concerned with education, youth development and environmental stewardship, NPOs need to solve problems within their communities to enable them to thrive. The company favours projects that are aligned with the National Development Plan – one particular project triangulated student vacation work with municipal capacity-building, and the model can be replicated within municipalities around the country, according to Ngcwabe. Governance is critical to the company, which wants to see proof of registration, founding documents and the minutes of board meetings, as well as compliance with BEE codes.
Volkswagen similarly adopts a strategic, long-term approach, with 85% of its budget going towards education and youth development, and the rest devoted to community health and wellbeing, employee volunteerism and local economic development. It works predominantly in the Eastern Cape and has a legacy initiative that ensures that all learners in the greater Uitenhage area are functionally literate by the age of ten.
The company seldom makes ad hoc funding available, but when it does it provides general operating support, identifying NPOs whose social return on investment is very clear and whose implementation is superior.
“When it comes to choosing an NPO, a clear theory of change is very important for us. We need to know what problem the organisation is solving,” said Maliza. “What evidence do you have that your methodology will work? Is there evidence you are learning and growing from your actions, both good and bad, and are you willing to share critical data?”
Although the three companies represented are largely invested in education, they are not averse to supporting other initiatives. For Solomon, it is vital to look at education from a holistic perspective, which is why AECI prioritises learners’ access to water and food security and ensures that a learner with access to a TVET college also has a stipend that covers transport, for example. “We make a plan to enable people, or we are setting them up to fail,” Solomon said. She pointed out that the company would be willing to invest in psychosocial support if institutions felt this was important.
Both Maliza and Ngcwabe highlighted the fact that site visits can help to mitigate funding risk, and these are about learning from a process rather than policing implementing partners. “We need to trust management and leadership,” Maliza stressed.
All the panellists were in favour of collaborating with other companies to achieve their CSI objectives. “We don’t fight for branding space in CSI since we’re working towards a common cause,” Solomon pointed out. For Maliza, partnership is crucial as CSI resources are finite and it may not be possible to scale without collaboration. NPOs are encouraged to work with multiple partners and even crowdfund if these strategies will deliver the desired outcomes.
Advice for non-profits seeking corporate funding
Each panellist was asked to leave NPOs with a final word of advice when thinking about corporate funding.
For Maliza, having a clear theory of change and being able to demonstrate impact is key – it is important to be clear about the problem to be solved, to measure concretely and objectively over time, and be willing to learn from practice on the ground and from what others have done. “We want you, the NPO, to be the expert on the project to some extent – we are looking for leadership and people willing to invest time and expertise in an area, and come up with critical solutions to a problem,” she said.
Solomon said that NPOs that follow their purpose stand out. “Stay true to your ‘why’ – it’s your purpose that will keep you on your True North path,” she told attendees. ‘Research shows that organisations with purpose have a more strategic outcomes in the long term.” Being able to articulate and demonstrate one’s value to stakeholders is useful, as is knowing the difference between simply communicating (sending an email, for example), and being able to touch donors and drive them to action. She agreed with Maliza that non-profits should be experts and leaders in their field, able to advise on the best course of action.
Ngcwabe highlighted responsiveness, saying that organisations working with particular communities should be there for them in the event of any disaster, not just the pandemic. “You can’t be in a community working for a cause but when there’s a disaster you’re missing in action,” she said. She said consulting with stakeholders is vital, as is asking communities what they need rather than taking solutions to them. She also emphasised the importance of compliance and accountability to all stakeholders.
Trialogue’s fundraising considerations:
- Seek a variety of funding sources to address different operational requirements.
- Target fewer, more relevant CSI budgets and understand the strategic CSI positioning of the companies that you approach (including their business agendas).
- Ensure ‘compliance’ boxes are ticked.
- Identify financial and non-financial needs suited to the company.
- Offer clear opportunities for reciprocity and recognition.
Share your track record of funder relations and financial stability.
- Demonstrate holistic monitoring and evaluation.
- Show adoption of lead practice/thought leadership.
- Commit to required reporting, transparency and accountability.
- Build factors into your proposal that would contribute to smooth exit.
Watch the webinar below:
- AECI’s Wise Wayz Water Care project helps to drive the green economy: https://www.trialogueknowledgehub.co.za/index.php/news-sharedvalue/1061-nicole-solomon-on-the-aeci-wise-wayz-water-care-project
- Barloworld’s Social Youth Innovation Awards (BSIYA) recognise and support youth-led entrepreneurial innovations that are creating social value and have the potential for longevity and scalability: https://www.trialogueknowledgehub.co.za/index.php/162-sectors/entrepreneur-and-small-business-support/related-articles/893-celebrating-youth-led-innovation-and-supporting-entrepreneurship-barloworld
- The Volkswagen Community Trust promotes equality through early education: https://www.trialogueknowledgehub.co.za/index.php/case-studies-literacy/1363-volkwagen-community-trust-promoting-equality-through-early-education
- Development sector insights: education https://www.trialogueknowledgehub.co.za/index.php/educationsector